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Yield Curves Invert in U.S., U.K

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Re: Yield Curves Invert in U.S., U.K

#571

Post by [deleted] »

ep103 wrote: post #541
bduerst wrote: post #513

Earlier quoted context omitted.

"Having a different set of priorities" is just another way of saying someone is stupid or irrational. This base is supporting someone who is not acting in their best interests, because yes, their best interests are not a priority. There's even a term for this in economics, called Animosity , which leads to economic imbalance: https://en.wikipedia.org/wiki/Economic_discrimination#Animos...

There's also a term for it, called Reciprocal altruism, which is in many ways, the basis and foundation of human society.

[deleted]

Re: Yield Curves Invert in U.S., U.K

#572

Post by chillacy »

fucking_tragedy wrote: post #427
cestith wrote: post #278

Earlier quoted context omitted.

I'm not sure we can blame our fentanyl problems on China any more than our cocaine problems on Colombia or our heroin problems on Mexico. Currency control comes with being a sovereign nation. Our government and the Federal Reserve in the US issue more or less new money into the economy and raise or lower interest rates to control the strength of the US dollar all the time. I'm not sure dumping is a real problem for m…

The vast majority of fentanyl on the US black market is synthesized in 'clandestine' labs in China and shipped directly from there to dealers in the US via the post.

Why is this different than the cocaine or heroin supply chain? Or why did mention this as a response to:

> I'm not sure we can blame our fentanyl problems on China any more than our cocaine problems on Colombia or our heroin problems on Mexico.

Re: Yield Curves Invert in U.S., U.K

#573

Post by ethbro »

ummonk wrote: post #351
ethbro wrote: post #290

Earlier quoted context omitted.

It seems like one of the key characteristics in a crash is a domino effect. Whereby companies' financials that previously looked solid are suddenly cast as untenable in a new economic light. Usually because of an underappreciated correlation with a substantially removed market. E.g. most recently, banks and leveraged junk mortgages As you noted though, the biggest tech companies today aren't really externally depende…

I think there are definitely systemic risks which could hit the US economy (small recession due to everyone cutting back spending to weather the recession, resulting in poorly profitable zombie firms - many of them retail firms - being unable to service bad corporate debt). It's noteworthy that we've been seeing retail bankruptcies like Sears and Payless in a consumer economy this good - what happens to other retaile…

Sears (and possibly Payless too) were mortgaged past the point of sustainability.

That's fundamentally different from firms that accrued a lot of cheap debt, but have an ability to service it even under conservative revenue models.

If I have 10%+ profit margins and could increase my revenue with additional capital, why wouldn't I sell as many bonds as the market will eat, at current prices?

Provided I'm not expanding in financially risky ways (e.g. opening new stores or other delayed-revenue choices), there's not much consequence even if the music stops playing.

Which is why you saw Ford and GM announce they're hording enough cash for multiple years of downturn.

Re: Yield Curves Invert in U.S., U.K

#574

Post by bduerst »

ep103 wrote: post #541
bduerst wrote: post #513

Earlier quoted context omitted.

"Having a different set of priorities" is just another way of saying someone is stupid or irrational. This base is supporting someone who is not acting in their best interests, because yes, their best interests are not a priority. There's even a term for this in economics, called Animosity , which leads to economic imbalance: https://en.wikipedia.org/wiki/Economic_discrimination#Animos...

There's also a term for it, called Reciprocal altruism, which is in many ways, the basis and foundation of human society.

Economic discrimination, for purposes of animosity, is the opposite of reciprocal altruism.

Re: Yield Curves Invert in U.S., U.K

#575

Post by asdf21 »

tempguy9999 wrote: post #264
asdf21 wrote: post #241

Earlier quoted context omitted.

There are strategic bankruptcies..

Serious question: how do these work, and can you actually make money off. or can you only limit cash losses with them?

You have multiple businesses, and sell assets between them... then bankrupt the lame ones.

Example: Business 1 buys a $1M piece of equipment with 30% down and 70% credit. After a couple years, and knowing that Business 1 is not that profitable anyway, the machine is sold to Business 2 for $150k, even though it's probably worth $700k still.

Business 2 makes $550k profit on the books. Business 1 files bankruptcy. The creditor loses their $250k outstanding loan. If the same owners own both businesses, they come out massively ahead.

Rinse / repeat with dozens (or hundreds) of businesses, some automated workflows and depreciation tables, credit line hacking, etc.

Re: Yield Curves Invert in U.S., U.K

#576

Post by tomp »

SkyBelow wrote: post #238
magduf wrote: post #188

Earlier quoted context omitted.

>I guess if his base can't put 2 and 2 together that prices are rising due to his tariffs it almost makes sense. His base really can't put 2 and 2 together. You seem to think it's obvious that tariffs will cause prices to rise, but you seriously underestimate just how stupid these people are.

If your explanation requires assuming that both very powerful politicians and their supports, constituting tens of millions of people, are all incompetent, then perhaps you need to consider an explanation that doesn't require such assumptions.

I agree with both your reasoning and your sentiment, but I just want to point out, that it's not quite that obvious...

https://www.npr.org/sections/thetwo-way/2014/02/14/277058739...

> 1 In 4 Americans Thinks The Sun Goes Around The Earth, Survey Says

i.e. about as much as voted for each of Trump/Clinton in the last election (which also taught us, amongst other things, that surveys are not to be trusted...)

Re: Yield Curves Invert in U.S., U.K

#577

Post by rland »

kingnothing wrote: post #398
dageshi wrote: post #335

Earlier quoted context omitted.

There isn't anything like the housing bubble right now. There's nothing that really allows people who shouldn't be able to borrow lots of money to borrow lots of money like housing did last time. What you're describing is just the normal stuff that happens in all recessions. And as much as we had a long boom, we also had quite a long painful recovery from 2008, it wasn't the same as normal recovery which explains why…

There's the looming student debt crisis, which is absolutely allowing lots of people to borrow money they shouldn't be able to get. People are graduating college well into six figures of debt with nearly worthless degrees that pay little more than minimum wage. Even worse, the government guarantees that debt is not dischargeable in bankruptcy, leaving no way out for the underwater borrowers.

The student loan thing is more of a big weight dragging on the middle class. It’s not like anything is going to implode — the debt isn’t dischargeable. Instead, it’s just going to drag on and on for decades, preventing the lower classes from building wealth or having kids. (In many ways, that’s a lot worse)

Re: Yield Curves Invert in U.S., U.K

#578

Post by wonderwonder »

godtoldmetodoit wrote: post #550
wonderwonder wrote: post #359

Earlier quoted context omitted.

Just my opinion but I think it will be worse than 2008 for normal people. Companies that are cash rich due to the tax cuts will use the recession as an excuse to execute deep labor cuts and boost their stock price. There is no longer a reason for executives to even pretend to care about employees as the one time bonus / stock buy backs after the tax cuts proved. Wells Fargo has already proven that the same rules that…

We need Andrew Yang, or somebody else to pick up the UBI idea, now. There's no time to slow play this and do a bunch of studies. We have enough data, somebody just needs to do it.

I agree, I think we are reaching a tipping point where the economy so favors those with established wealth and corporations that UBI is going to become a necessity. It does not have to be a lot of money, just enough to provide people with a small cushion so they can take small risks to better themselves or afford the basics.

I think something overlooked by many is that without the small cushion of having family to fall back on if everything went bad or a nest egg, many of today's entrepreneurs would not exist. Risk for those whom failure means living on the street is generally avoided, especially for people with kids. A UBI would allow them to try and compete or at least live life without waking up terrified every day.

Re: Yield Curves Invert in U.S., U.K

#579

Post by hnbroseph »

blackflame7000 wrote: post #473
notJim wrote: post #312

Earlier quoted context omitted.

Even if that's true, is a trade war (which seems to be hurting some of our exports anyway…) the way to fix the trade balance?

Tariff money is supposed to subsidize the industries harmed by the tariff. There is an inequality in goods in which the US has a major advantage. To put it simply, it's much easier for us to grow soy than it is for China to replicate our technology. Furthermore, the Chinese economy is not doing nearly as well as the US which means we are in a position of power at the moment. It is extremely important that the US mini…

> a dose of medicine for the consumer

seems like there's a risk of:

higher labor and materials costs leading to higher prices, leading to lower sales, leading to reduced revenue, leading to workforce reductions, leading to lower sales, leading to reduced revenue, leading to workforce reductions...

ie a basic recession spiral.

Re: Yield Curves Invert in U.S., U.K

#580

Post by omegaworks »

pdonis wrote: post #553
ethbro wrote: post #327

Earlier quoted context omitted.

Inflation is a consequence of money spent foolishly. The same arguments were made against the New Deal. Time will tell whether recapitalizing the American educational system and/or cost-limiting health care is wise or foolish.

> Inflation is a consequence of money spent foolishly No, it's a consequence of printing money as soon as the newly printed money gets out into the economy. The only reason the previous rounds of QE in the last decade didn't cause inflation was that practically all of it stayed in the banks' accounts at the Fed and never got loaned out, so it never actually got into the economy. > The same arguments were made against…

The New Deal allowed labor to capture the majority of surplus value created by the rapid wartime industrialization of America. We would not have our modern understanding of a middle class lifestyle had it not been for New Deal policy and the blood of organized labor shortly before and during wartime.
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